indo-pak trade

A paramilitary soldier stands guard as a truck crosses into Pakistan from India, at the Wagah border

It seems that the PML-N government may well be set to achieve one of its key policy goals ie bolstering trade with India. During 2013, the process of normalization was scuttled by the untoward tensions on the Line of Control (LoC) and the situation was controlled in part by the meeting of DGMOs in December 2013. That was a welcome initiative led by Nawaz Sharif himself and reportedly some quarters were not all that pleased with such a putsch from the PM’s office.

For years, the right wing and fringe extremists have abused the term Most Favoured Nation (MFN) as some kind of a ‘concession’ to India at the cost of national sovereignty. The political elites have resisted this narrative and Sharif happens to be the most consistent and clear advocate of trading with India. To bypass the constructed discourse on MFN the government is set to give India Non Discriminatory Market Access (NDMA) – on a reciprocal basis – which essentially implies sorting out some of the irrational barriers erected over the years to discourage and/or block trading with the enemy. The positive list of Pakistan comprises 8000 items, but only 1967 are importable from India while the negative list includes 1209 items. In 2012, federal cabinet approved abolishing this negative list. […]

Notwithstanding Pakistan’s internal challenges or the ‘war on terror’ in its backyard, the troubled relationship with India continues to drive its internal and external policies. Pakistan’s mighty military is essentially trained to counter the bigger neighbour and imagines India to be the greatest threat.

In recent years, there have been signs of some shifts in military’s worldview but these shifts are yet to filter down into the institutional structures: the way strategic calculations are made and ‘threat perception’ is determined. Despite these structural constraints, the political elites have resolved to undo the bitter legacy of the past and push for improved trade ties and continued dialogue with the archenemy. At times the enthusiasm of Pakistani politicians appears to be at variance with the views of Indian political class, which seems divided on how to transact this bilateral relationship.

Since the election of Nawaz Sharif as the Prime Minister in June 2013, domestic terrorism and skirmishes at the Line of Control (LoC) have prevented any major development to take place. In fact by the end of 2013, many feared that the modest gains (trade and visa liberalization) made in the past few years had been reversed due to the continued hostilities at the border. […]